Attorney Todd Guerrero urges the Minnesota Public Utilities Commission Tuesday to support a western Minnesota electric transmission line project related to the proposed Big Stone II power plant.2 / 2

ST. PAUL -- Closing arguments in the Big Stone II transmission case yielded more questions from state officials weighing the project.

Regulators on Tuesday questioned utilities led by Fergus Falls-based Otter Tail Power Company about their proposed electric transmission project in western Minnesota.

The project's price tag and future costs to the utilities to limit pollutant emissions from the proposed coal-fired Big Stone II plant in eastern South Dakota remain key issues in the case.

The five-member Minnesota Public Utilities Commission is poised to decide the case Thursday, more than three years after the utilities first approached the regulators seeking to boost electricity transmission capacity in Minnesota, North Dakota and South Dakota.

Minnesota regulators have no say over construction of the coal-fired power plant, but the energy companies say new transmission lines in Minnesota are necessary in order for the entire $1.6 billion project to go forward.

Big Stone II attorney Todd Guerrero said there is a need for expanded transmission capacity, there are no viable alternatives to the project and the applicants met criteria for a "certificate of need."

The utilities also stress the need for action. The two largest firms in the group - Otter Tail Power and Montana-Dakota Utilities - are losing contracts for electricity from other providers in the coming years. They need a replacement source of electricity.

"We are running out of time," Guerrero told the commission.

Big Stone utilities want to build two transmission lines carrying electricity generated from the proposed plant to stations near Willmar and Granite Falls.

The utilities said the project would help the regional economy. Power plant and transmission line construction would provide an average of 650 full-time construction jobs, said Project Manager Mark Rolfes of Otter Tail Power.

The plant, once constructed, would employee 40 to 50 people at a "livable wage," Guerrero said. Some union construction workers traveled to St. Paul for the hearing.

But Commissioner Tom Pugh, a former Democratic state lawmaker, pressed the utilities about whether Minnesota workers would fill the positions.

"We will take all the Minnesota labor we can get - and other places, too," Rolfes said.

Environmental groups opposed to the project say the utilities low-balled the construction estimate and have not adequately considered the future costs associated with carbon dioxide emissions. Opponent Elizabeth Goodpaster said the utilities have had more than enough time to prove the project is needed.

"But the reality is they have failed to do so," said Goodpaster, lead attorney for the project opponents. That group includes the Minnesota Center for Environmental Advocacy and the Izaak Walton League.

A main argument of Goodpaster's group is that the utilities are relying on outdated models for their project. Utility regulators in other states have rejected power projects because their cost estimates were as "stale" as Big Stone estimates, Goodpaster said.

Commissioner Betsy Wergin said state law does not require utilities to conduct any modeling of future costs for emitting carbon dioxide, a greenhouse gas.

"If none has been required and some has been done, at what point is it enough?" asked Wergin, until recently a Republican state lawmaker.

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Big Stone II supporters and opponents agree there is a need for additional transmission capacity for new wind-generated energy projects, but opponents say the transmission lines are primarily meant to serve the coal-fired plant.

The transmission line project would occur along the wind-rich Buffalo Ridge region of southwestern Minnesota. "Does that not make it a prudent thing to do?" Wergin asked.

Otter Tail Power and Montana-Dakota Utilities are joined in the project by Missouri River Energy Services, Central Minnesota Municipal Power Agency and Heartland Consumers Power District. In addition, local utilities that purchase power from those firms also want the Big Stone II project to go forward.

Commission members are weighing difficult issues such as environmental costs of a power project versus energy reliability, Wergin said. Their job is made more difficult because the region has not seen construction of a similar electric-generating plant in more than 20 years.

"We're weighing tough issues that have virtual unknowns ..." Wergin said. "We're struggling with doing the best we can in the environment we're serving in."